How to price legal services to attract high quality referrals?
This is part five of a series on the top five concerns lawyers have about getting referrals.
To recap, I have just concluded a survey of small law firms where I asked then what their biggest concerns were in regard to getting referrals from people within their professional network.
From their replies we have arrived at the top five concerns lawyers have with getting referrals.
- 1) What can I offer to a potential referrer so that they get something out of the referral?
- 2) How do I consistently get true referrals as distinct to an incentivised referral?
- 3) How do I approach busy potential referrers without being a nuisance?
- 4) How can I avoid getting the wrong referrals such as time wasters?
- 5) How to price legal services to attract high quality referrals?
In the last four articles I addressed the first four issues. If you missed them you can find the links at the bottom of this article.
In this article I will address issue five.
5) How to price legal services to attract high quality referrals?
This question came up over and over in the survey, so it clearly is causing some concern amongst lawyers looking to get more quality referrals.
If you are comfortable with the prices that you already charge for the type of work that you want to attract, I don’t necessarily think you need to make any changes to those prices to attract high quality referrals.
I don’t know about you, but I’m sure I am not the only one who gets cheesed off when I see a business where I am an existing customer, offering a great deal to attract new customers, that is not extended to the existing customers ( including me)!
As I’ve mentioned in the previous articles, these are two types of referrals, referrals from your existing clients and referrals from colleagues who are generally within your professional network and as before, the strategies to deal with each are a bit different.
Let’s look firstly at your existing client referrals.
I have talked in the previous articles about your “ideal client” and you really need to have a good handle on who your ideal client is to be able to adopt the strategy I am about to map out.
Assuming that one of the attributes of your ideal client is that they are happy to pay reasonable fees, within your payment terms, then you could quite readily identify the existing clients without your database who fit that criteria.
Assuming that this subset of your database fits other “ideal client” criteria that you have, then you can target this subset of your database for referrals.
In my experience, one of the best referrals you can get is a referral from an existing client who prefaces their comments to the person they are referring, by saying “They aren’t the cheapest in town but they are really good at what they do”
This referred client comes on board already expecting to pay the level of fees that you charge and you can get on with the job of just doing a great job.
Let’s shift the focus to professional network referrals.
The dilemma in regard to professional network referrals appears to be “If a potential referrer asks what I charge and I’m seen as too expensive, I may not get any referrals at all”
So what do you do?
If your strategy is to in fact be the cheapest in town, then there would be many approaches you could take. For example the Bunnings approach “ Find a cheaper price and we’ll beat it by 10%”. I’m sure you could think of other strategies.
If you don’t want to position yourself at the cheap end of the market, then I think you need to say so. This can be along the lines of “We are certainly not the cheapest but let me explain why….”
I mentioned before about knowing who your ideal client is and once again this is where that knowledge can help you.
One key element of knowing who your ideal client is, is knowing what their concerns are and then specifically how you can help them address those concerns.
If you can really drill down to “What keeps them awake at night” and build your solutions to these ideal client problems, in my experience price ceases to be quite so important.
If your solution to an ideal client problem is “unique”, then so much the better, as it much harder to compare the price of a “unique” service.
If you are happy with your prices, then I don’t think that a strategy of offering a cheap price for referrals, has to be one that you adopt and these strategies I have outlined here may help you to develop an approach to take where price is not the focus.
Have you missed any of the first four articles
Are you interested in a new approach to getting referrals from your professional network? Click on the following link ” Professional network referral system for smaller law firms“
Are you interested in a new approach to getting referrals from your existing clients? Click on the following link ” Existing client referral system for smaller law firms“